A previous post on the reasons given by government for setting student contributions, like this post based on a new paper of mine, listed five rationales used for implemented policies: course costs, private benefits, public benefits, increasing resources per student place, and incentivising course choices.
A sixth rationale has repeatedly been considered but never become policy, the idea that the distribution of benefits between public and private should drive the distribution of costs between public and private, as represented by the government and students. This post explains where this idea came from and why it has always been rejected.
Origins in the justification for HECS
As my earlier post noted, the public-private benefits idea first appeared in the Wran report that led to HECS. Its logic was not explained, but I think it was a corollary of the private benefits argument – that if students should pay for their higher education because they received private benefits then it seemed to follow that the government, on behalf of the public, should pay for the benefits they received. This is a normative argument about who should pay rather than an empirical claim that public subsidies produce public benefits.
The Wran report did not recommend this approach because calculating private and public benefits was too hard.
The balance metaphor
As part of the 1996 Budget the Howard government, with Amanda Vanstone as minister, introduced private benefits as a rationale for specific course contributions. Conceptually, however, this was quite different to the private-public benefits idea. The Vanstone version was the private benefits of a course relative to the private benefits of other courses, rather than the Wran private benefits of a course as a proportion of all benefits private and public or, at a system level, overall higher education private benefits as a proportion of all benefits.
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In a new paper published by the U of M’s Centre for the Study of Higher Education I chronicle the history of student contribution rationales – the reasons the government gave for HECS rates and then student contributions.
I argue that five rationales have been used: private benefits, course costs, increasing resources per student place, incentivising course choices and public benefits.
A key turning point is the 1996 Budget, when the government abandoned a flat HECS charge across all disciplines and introduced differential HECS. This required a more complex set of justifications than previously. The government’s arguments had to explain not just why students should pay compared to the previous free higher education system, but also why they should pay more for some courses than others.
The Wran report
The HECS system was recommended in a 1988 review chaired by former NSW Premier Neville Wran. It introduced four concepts that were subsequently influential in thinking about how to charge for higher education: private benefits, public benefits, a balance between private and public benefits, and course costs.
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In the first post in this series on the conceptual and philosophical thinking behind student contributions, I argued that successive governments have primarily used them to limit system-level public expenditure.
Once the public spending constraint is achieved, this approach leaves room for other methods of setting student contributions. This post looks at giving universities a role in deciding what level of student contribution to charge.
Liberal plans for fee deregulation
The idea that universities should set their own fees on top of a government subsidy has a long Liberal lineage. Plans to lift controls on fees were in the 1991 Fightback! package, David Kemp’s 1999 leaked Cabinet submission, and in Christopher Pyne’s unsuccessful 2014 higher education reform proposal.
For fiscally-constrained governments, part of fee deregulation’s attraction is its scope to further reduce public expenditure. Universities can compensate for public spending cuts with increased student charges. But fee deregulation also has a more positive agenda.
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This is the first of a series of posts looking at the conceptual and philosophical issues underlying debates about student contributions since the late 1980s.
The series is prompted by Dan Tehan’s proposed changes to student charges, but not limited to them.
This first post looks at the student contribution’s relationship to overall public funding, and whether it is intended to offset total government expenditure on higher education, or the cost of the student’s own course.
Course cost student contributions have been considered, but not implemented
The Whitlam experiment with free higher education ended in the late 1980s because the Hawke government wasn’t willing to pay the full cost of expanding enrolments. But then and since people have disagreed about whether students should contribute to their own costs or more broadly to the system’s costs.
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